Seipp Company purchased a vehicle on January 1, 2018. During 2018, 2019 and 2020 they made various expenditures related to that vehicle. Determine which expenditures are revenue expenditures and which are capital expenditures. Expenditure 1 Painting company advertising on vehicle 2 Oil change and tune up 3 Repair of punctured tire 4 Annual insurance premium 5 Annual registration sticker 6 Overhaul of engine 7 Addition of trailer-towing package 8 Gasoline 9 Application of rust prevention package
Problem 10-2
Seipp Company purchased a vehicle on January 1, 2018. During 2018, 2019 and 2020 they made various expenditures related to that vehicle. Determine which expenditures are revenue expenditures and which are capital expenditures.
|
Expenditure |
|
|
1 |
Painting company advertising on vehicle |
|
2 |
Oil change and tune up |
|
3 |
Repair of punctured tire |
|
4 |
Annual insurance premium |
|
5 |
Annual registration sticker |
|
6 |
Overhaul of engine |
|
7 |
Addition of trailer-towing package |
|
8 |
Gasoline |
|
9 |
Application of rust prevention package |
Problem 10-3
On January 1, 2017 Baker Company purchased a new delivery van for $84,000 that had an expected salvage value of $12,000. Its useful life was estimated to be 4 years or 160,000 miles.
Its actual mileage was
2017 37,800 miles
2018 43,600 miles
2019 39,100 miles
2020 39,500 miles
For Parts 1, 2, and 3, use the specified method to calculate the
Part 1: Straight-Line Method
Part 2: Double-Declining Balance Method
Part 3: Units-of-Production Method
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